Libor Regulations Agreed After Rate-Rigging Scandal

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Sweeping changes to the system of financial regulation, which took effect on Tuesday, has brought the London inter-bank lending rate under the net of statutory regulation for the first time.

The government introduced formal regulation for Libor after the furore caused by the £290m fine paid by Barclays for rigging the key benchmark rate, which has since been followed by penalties for UBS and . More fines are expected to follow.

From July, the rates banks submit to the Libor panel will be published with a three-month delay, in line with a recommendation by Martin Wheatley, head of the new Financial Conduct Authority, who reviewed Libor last year.

He also recommended cutting the number of Libor currencies from 10 to five and borrowing periods from 15to seven.

The last rates for the New Zealand dollar were published at the end of February, and the final rates for Swedish kroner and Danish krone last Thursday.

Anthony Browne, chief executive of the British Bankers' Association, said: "We believe these changes taken together reflect our commitment to meeting the absolute priority for everyone involved in this process, from users to regulators – the provision of a reliable benchmark which has the confidence and support of all users."

Powered by Guardian.co.ukThis article was written by Jill Treanor, for The Guardian on Tuesday 2nd April 2013 18.40 Europe/London

guardian.co.uk © Guardian News and Media Limited 2010

 

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